Nat cats deliver $123bn in 2023 insured losses; US severe storms dominate
Natural disasters delivered $123 billion in insured losses in 2023, making the $100 billion mark a new normal, but crossing the threshold for the first time without a single major event above $10 billion as secondary perils took over, analysts at global reinsurance brokerage Gallagher Re have claimed.
The $100 billion mark is thus crossed for the fourth consecutive year and for six of the past seven. “A new normal.”
The estimated direct economic cost of natural hazards was $357 billion, Gallagher Re says of a tally including direct physical damage and net-loss business interruption.
2023 will stand as the first year where global insured losses topped $100 billion without a single event being responsible for more than $10 billion, but rather on an aggregation of secondary perils, Gallagher claims. All major perils except European windstorm have otherwise established a record of crossing that threshold, analysts claim.
“It suggests a narrative shift in how the re/insurance industry accounts for the ‘new normal’ of high loss years," Gallagher authors wrote.
Where major losses went missing, US severe convective storm (SCS) stood in. The SCS peril topped $71 billion in 2023, some 57% of the total, of which $60 billion occurred in the US alone. That constitutes a record for insurers globally and in the US, authors claimed.
On the Gallagher ranking of insured losses, US drought, focused in the plains states and midwest ranks tops with $7.2 billion in insured losses for the USDA’s Risk Management Agency’s crop insurance program, roughly half the recorded economic
That payment fits a trend for a “greater portion of losses covered by government-sponsored insurance entities” that has also included the National Flood Insurance Program or the Turkish Catastrophe Insurance Pool in 2023. Public entities paid $13 billion of the $123 billion insured losses in 2023.
Second on the Gallagher ranking of insured losses is the February earthquake in Turkey, although the $6.1 billion price tag is a tragically small portion of the $46.2 billion in economic losses. Points three through five on the list go to US convective storms. The first ‘primary’ weather-related perils hit only at sixth place in 2023: Hurricane Otis in October at $4 billion. Seventh place goes back to ‘secondary’ perils: the $3.8 billion Hawaii wildfire.
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